US stocks rebound as investors look for a bottom

Markets were mixed on Friday.

The S&P 500 recovered from an early slide to finish up 1.5 percent. Earlier in the day, the STOXX Europe 600 fell 0.7 percent and the Nikkei 225 plunged 2.3 percent.

Despite the rebound on Friday, the S&P 500 still ended the week down 5.2 percent.

Bruce McCain, chief investment strategist at Key Private Bank, said that “we need to form a pretty stable base before investors can feel reassured the bottom won’t fall out from under them, and it will take some more price action before that occurs”.

Stephen Gandel at Bloomberg suggested that “a reasonable floor for stocks isn't much lower, about 2 percent, which could be why they were rallying on Friday”.

However, David Rosenberg, chief economist and strategist at Gluskin Sheff, noted that the recent correction occurred even as the US 10-year Treasury yield rose 16 basis points.

“This rare occurrence of bond yields rising even as stock markets decline was a feature in 1987 and 1994,” he said. “One of these years had a huge correction and one had massive volatility and rolling corrections. Pick your poison.”